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Separating Economy and State: The 21st Century’s Biggest Battle

By: Contributor - May 31, 2015, 11:11 pm

The history of mankind has been characterized by an eternal struggle for freedom. From fighting the despotic nature of kings to securing the right to freedom of speech and assembly, the past millennium has seen political structures based on 100 percent plunder reduced — to structures based on 50 percent plunder. It’s a start, at least.

Despite all the progress made in human freedom over the past few centuries, one sphere of human freedom still finds itself under considerable control by the state — the economy.

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The separation of economy and state may one day also be taken for granted. (Dale Spencer)

Over the last 300 years, the separation of church and state in the Western world and many other regions represented one of the greatest victories of Enlightenment-era thought.

No longer was a person subject to persecution for his religious beliefs or lack thereof. He could now worship freely, or not, wherever he desired without fear of the state taking heavy-handed action against him.

The separation of the state from the private sphere of life — speech, assembly, and religion — has benefited societies in various ways. We now have a more dynamic and pluralistic world than ever before.

Similarly, the resounding triumphs of the 20th century against communism marked a monumental feat in human freedom, as the most destructive economic system in human history was put to rest in most of the world.

But even with this clear victory, there remains much work to be done in the realm of economic freedom. Clear differences exist in the economic development of the First and Third World; differences that can be largely attributed to the degrees of economic freedom that the one set of countries enjoys relative to the other.

For true economic progress, there must be a complete separation of economy and state, for the same reasons that there is a separation of church and state.

Admittedly, the West still leaves a lot to be desired within the realm of economic freedom: especially when one takes into consideration the degree of economic freedom that the West once enjoyed in the 19th century, where laissez-faire and classical liberal ideas were the order of the day. It was in this era that the West was able to industrialize and experience unprecedented rates of economic growth and development for decades to come.

Unfortunately, many Western governments fell for the gradualist style of Fabian socialism that gained steam in the wake of World War II. Currently, many developed countries have sizeable welfare states that are pilfering the savings and hard work accumulated during the laissez-faire era of the 1860s to the 1930s. Sooner or later, economic reality will hit and these funds will run out.

Despite this bleak outlook, there is still hope on the horizon. The 21st century is characterized by the predominance of the Internet, a network that has effectively brought billions of people across the globe to partake in unprecedented levels of peaceful exchange and commerce. No matter how you slice it, the Internet is a fixture of our daily lives and is not going away anytime soon.

But the web itself is only the tip of the iceberg. Now, consumers have access to innovative transportation services such as Uber and revolutionary mediums of exchanges like bitcoin at their disposal.

Even contending with the state’s increasing power, the human spirit always finds ways to innovate and bring goods to individuals in an efficient manner.

None of the aforementioned innovations were developed in government offices or institutions. Entrepreneurship in the free market is the only way to bring about cost-effective innovation. If mankind wants to eradicate extreme poverty and maximize human potential, there must exist a complete separation of economy and state.

Just as the separation of church and state is a given throughout most of the world, the separation of economy and state must become a part of our everyday political lexicon and civic culture. All forms of government intrusion, from the federal level all the way down to the municipal level, must be fought tooth and nail.

Every form of government regulation is effectively a hidden cost for consumers and entrepreneurs. In the worst-case scenario, they can snowball into barriers of entry for humble entrepreneurs that want to break free from the shackles of poverty.

These injustices cannot go on. In the 21st century, classical liberals, libertarians, and other defenders of free markets, must make the separation of economy and state a rallying call for human freedom. To eradicate poverty, economic liberty must exist.

One day, attempts to pass onerous economic regulations will receive the same amount of ridicule and derision that measures trying to get government involved in religion do now. Let’s make this dream a reality.